{"id":2642,"date":"2009-05-27T10:16:52","date_gmt":"2009-05-27T14:16:52","guid":{"rendered":"http:\/\/www.amybergquist.com\/blog\/?p=2642"},"modified":"2009-05-27T10:16:52","modified_gmt":"2009-05-27T14:16:52","slug":"change-to-tax-exclusion-on-sale-of-primary-residence","status":"publish","type":"post","link":"https:\/\/www.amybergquist.com\/blog\/2009\/05\/27\/change-to-tax-exclusion-on-sale-of-primary-residence\/","title":{"rendered":"Change to Tax Exclusion on Sale of Primary Residence"},"content":{"rendered":"<p><img decoding=\"async\" src=\"http:\/\/www.amybergquist.com\/blog\/wp-content\/uploads\/2009\/05\/noah-webster.jpg\" alt=\"Noah Webster\" align=\"left\" \/><strong>The Housing and Economic Recovery Act of 2008 changed the tax rules around the sale of primary residences<\/strong> in a way that has not been widely discussed.  Homeowners may no longer be able to claim a full $250,000 (or $500,000 for married filing jointly) capital gains exclusion for a primary residence despite living there for 2 of the past 5 years.<\/p>\n<p>The new rules, which went into effect at the beginning of 2009, still use the 5 year look-back period.  They also retain the exclusion limits of $250,000 and $500,000.  However, sellers now need to scale the exclusion by the percentage of time that the property served as their primary residence over the past 5 years.  A quick example is the easiest way to illustrate the change.  Suppose an owner lived in a property for 2 years, then rented it out for 3, and is now looking to sell.  Because they lived there for 2 of the previous 5 years, they would be eligible for 40% of the credit.  Under the previous code, they would have qualified for the whole thing.<\/p>\n<p>Like all laws, this can get complicated quickly.  And portions could be open to interpretation.  So, <strong>investors and second home owners planning to take advantage of this gains tax exclusion need to consult with their people (accountants and\/or attorneys)<\/strong> to make sure that they are on track to achieve their real estate goals.<\/p>\n<p><strong>For Your Further Reading Enjoyment:<\/strong><br \/>\n<a href=\"http:\/\/www.gpo.gov\/fdsys\/pkg\/PLAW-110publ289\/pdf\/PLAW-110publ289.pdf\">The Housing and Economic Recovery Act of 2008 (refer to Section 3092 near the end)<\/a><br \/>\n<a href=\"http:\/\/www.law.cornell.edu\/uscode\/uscode26\/usc_sec_26_00000121----000-.html\">IRS Section 121 Code<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Housing and Economic Recovery Act of 2008 changed the tax rules around the sale of primary residences in a way that has not been widely discussed. Homeowners may no longer be able to claim a full $250,000 (or $500,000 for married filing jointly) capital gains exclusion for a primary residence despite living there for 2 of the past 5 years. The new rules, which went into effect at the beginning of 2009, still use<\/p>\n<p class=\"link-more\"><a class=\"myButt three\" href=\"https:\/\/www.amybergquist.com\/blog\/2009\/05\/27\/change-to-tax-exclusion-on-sale-of-primary-residence\/\">Continue Reading<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1582,1591,1594],"tags":[1701,1850,2081,2082,2386,2389,2672,2820,2821],"class_list":["post-2642","post","type-post","status-publish","format-standard","hentry","category-investment-properties","category-selling","category-taxes","tag-amendment","tag-capital-gains","tag-exclusion","tag-exemption","tag-investment-property","tag-irs","tag-primary-residence","tag-second-home","tag-section-121"],"_links":{"self":[{"href":"https:\/\/www.amybergquist.com\/blog\/wp-json\/wp\/v2\/posts\/2642","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.amybergquist.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.amybergquist.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.amybergquist.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.amybergquist.com\/blog\/wp-json\/wp\/v2\/comments?post=2642"}],"version-history":[{"count":0,"href":"https:\/\/www.amybergquist.com\/blog\/wp-json\/wp\/v2\/posts\/2642\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.amybergquist.com\/blog\/wp-json\/wp\/v2\/media?parent=2642"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.amybergquist.com\/blog\/wp-json\/wp\/v2\/categories?post=2642"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.amybergquist.com\/blog\/wp-json\/wp\/v2\/tags?post=2642"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}